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If you’ve ever read Benjamin Graham’s The Intelligent Investor, you know he famously ended the book with this sentence: “To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”

That’s all well and good, but what, exactly, was Graham getting at here?

To put those “satisfactory” gains into context, he notes in the preceding sentence the typical investor can be successful — “provided he limits his ambition to his capacity and confines his activities within the safe and narrow path of standard, defensive investment.”

Booooring!
Unfortunately, too many investors don’t have the patience or emotional fortitude to consistently stick with Graham’s safe, value-oriented, defensive methodology, even though it would almost certainly make them rich over the long haul.

To the contrary, instead of acting as defensive investors, many (read “almost all”) of us prefer the more exciting approach of acting as what Graham calls “aggressive,” or “enterprising” investors in search of those “superior results.” Unfortunately, we’re often more reckless than he would recommend, seeking out high-growth, speculative bets which come with excess risk attached.

When good is actually badStill, sometimes the stocks we choose can provide what appears to be fantastic gains on the surface.

The problem, however, is we often approach those gains with the wrong perspective.

For example, take one of my favorite investments in OLED specialist Universal Display Corporation (NASDAQ:PANL), which has not only grown revenue at a more than 61% clip over the past three years, but also finally turned in its first truly profitable fiscal year in 2012 as Samsung sold millions upon millions of devices featuring OLED screens enabled by Universal’s technology. What’s more, investors have bid shares up as the market looks forward to the coming mass production of OLED televisions, and solid state OLED lighting solutions show promise down the road.

In all, shares of Universal Display Corporation (NASDAQ:PANL) have risen 49% since I opened an outperform CAPScall on the stock in July, 2010. That sounds great, of course, until we note that the S&P 500 index has risen 52% over the same period — and without forcing investors to endure Universal Display’s ridiculous volatility.

Or take Ford Motor Company (NYSE:F), which has risen nearly 17% since I opened an outperform CAPScall on the stock in March, 2010. At the time, Ford had just posted its first annual profit in four years, and investors were excited when the company suggested that 2010 would show continued improvement.

Ford Motor Company (NYSE:F) certainly has come a long way since then, and it most recently wrapped up its 15th consecutive profitable quarter. However (and you can guess where this is going), the S&P 500 has offered an even more humbling 39% return over the same period, good for a full 22% of underperformance by my favorite automaker over the past three years.

Now don’t get me wrong: Many investors boast much lower entry points in both Ford Motor Company (NYSE:F) and Universal Display Corporation (NASDAQ:PANL), and I still own and love each of these stocks, with no plans of selling anytime soon. It’s difficult, though, to take solace knowing I could have achieved better results by doing absolutely zero homework and plunking my money in a low-cost mutual fund such as the Vanguard 500 Index Fund(VFINX), which is built to mirror the S&P 500 with an ultra-low 0.17% annual expense ratio.

“… harder than it looks”
To be sure, by definition, not everybody can be better than average, and beating the market is definitely a heck of a lot harder than it looks.

Take my own CAPS profile, where my accuracy is currently calculated at 64.67%. Remember, however, that’s not just the percentage of stocks I’ve chosen that have gone up. It represents the percentage of my picks that have actually beaten the market’s return so far.